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Issue of the Week
May 2, 2000
Who's Calling Checkmate in the Microsoft Trial?
A little-used law permitting direct appeals to the Supreme Court in certain antitrust cases could have a dramatic effect on the Microsoft trial's endgame.
U.S. District Court Judge Thomas Penfield Jackson's April 3 ruling that Microsoft illegally monopolized key software markets was only the beginning of the end for the high-stakes trial. Last week's agreement by the Justice Department and the 19 state attorneys general to push for a break up of the company has jolted the trial into double-or-nothing territory. At this stage in the game, each procedural move could have significant repercussions upon not only the legal process, but also the public relations and political battle for the hearts and minds of Capitol Hill legislators and the next president.
One key variable is whether the Clinton administration or the states will seek to short-circuit the appeals process by taking the case directly to the Supreme Court. Under a 1903 law known as the Expediting Act, any party to an appealed lawsuit that also involves the Justice Department's antitrust division may seek to take the case directly to the Supreme Court effectively cutting what is normally a three-court process to two.
This could have advantages for Microsoft's antagonists. First, it would deprive Microsoft of one of its best tools for whittling down whatever remedy proposal Jackson eventually endorses. The DC Circuit Court of Appeals, which would normally hear the appeal, overturned Jackson decisively in a previous ruling involving Microsoft.
Second, it could lead to a final resolution of the matter as much as two years sooner. And given the prospect that likely Republican presidential candidate George W. Bush could be more sympathetic to the software monopoly, getting the ball rolling on an appeal to the Supreme Court before Jan. 20, 2001, would make it extremely unlikely that a future administration could abandon the case.
Microsoft officials recognize this, and they are taking actions that are certain to string out the date of final decision. For weeks, they have been pointing out that any structural remedy proposal such as the split between Windows and application software proposed on Friday would mean a delay of "months and months" in the current remedies phase of trial, said William Neukom, executive vice president for law at Microsoft.
Indeed, in a meeting with Jackson two days after his ruling, lead trial attorney John Warden said, "we are not prepared to take any position as to the process that should be employed in this phase of the proceeding until we see the government's demand for relief."
"I think that's fair. I think that's fair," Jackson replied.
Hurry Up, It's Your Turn
And on Monday, Microsoft officials said that they intend to ask Jackson to agree to a timetable that would leave between three and four months for time to search government documents, take depositions and prepare for hearings on the government proposal. If accepted, that could delay a decision on remedies until after the November 7 election.
Critics of Microsoft say the moves are a stalling tactic, but Microsoft spokesman Mark Murray said the government keeps raising new issues such as potentially anticompetitive role of Microsoft Office at the 11th hour. "If the government is going to do that, Microsoft is entitled to a full and fair remedy," he said.
Although direct appeals to the Supreme Court are extremely rare, there are some analogous situations in which laws of dubious constitutionality are permitting a fast-track appeals process, as happened with the 1996 Communications Decency Act (CDA). That measure included a procedure for expedited review in which a district court with three judges normally only appeals court have three-judge panels rendered the first decision, to be followed by a Supreme Court appeal, if accepted.
The district court struck down that measure, and the high court sustained that decision. From date of enactment to final decision was little over a year breathtakingly fast for a court decision.
"Given the reality of the cliché about Internet time the way things change and the marketplace evolves, it was very helpful to have a direct appeal in the CDA case," said John Morris, an attorney with Jenner and Block, which represented industry groups that were seeking to overturn CDA.
"The appeal covered the period from mid-1996 to mid-1997," Morris said. "But by the middle of 1998, there were enough changes in the Internet, that one side or the other could have muddied the appeal" by pointing out how much the Internet had changed since the previous court decision.
The same thing could be true in the case of Microsoft. "The case will go more cleanly if it is done more quickly and chronologically close in time to the facts that Judge Jackson, as opposed to the two-year lag is fairly common," he said.
Other legal observers agreed that changing market realities could change the factual basis for the case, but felt that those arguments wouldn't be enough to entice the Supreme Court to take it.
"If it is their choice, they won't take it," said Bruce Kobayashi, an antitrust professor at George Mason University Law School. "Their docket is lighter and lighter each year, and a lot of [the Justices] are institutionalists in that they want cases to go through the circuits."
Until the Expediting Act was amended in 1974, the Supreme Court didn't even have a choice in the matter: they were required to accept all appealed Justice Department antitrust matters.
"The 1903 statute reflected the congressional view that antitrust matters were unusually important," said Bill Kovacic, an antitrust professor at George Washington University Law School. He said that law "had an influence on how the Supreme Court treated antitrust because it gave the court a level of familiarity with antitrust matters that was unique."
"Here was a special pipeline without the usual sifting process that takes place in the courts of appeal," Kovacic said. He noted that all major antitrust cases decided by the court before 1974 including the suit begun against Standard Oil in 1906 followed this procedure.
Will The High Court Pass On The Case?
But under the terms of the Expediting Act as amended in 1974, once either party files an appeal in this case, it is certain to be Microsoft one of the parties to the lawsuit may ask the judge to certify that the case is "of general public importance in the administration of justice" to be taken directly to the Supreme Court. It has accepted such a request in only one significant case the much-cited 1984 breakup of AT&T.
Although a spokeswoman from the solicitor general's office said that the administration has decided to defer making a decision until after the remedies phase of the trial, Microsoft's Neukom said on Friday that he didn't think the Court would take the case.
"As you know from the transcript of the statements in chambers, Judge Jackson is likely to certify the case for appeal," Neukom said in a conference call after the proposed remedies were announced.
"We think it's somewhat unlikely that the Supreme Court would keep it," he continued. In the years since 1974 "only one case has been kept [and] that was a consent decree review situation. This is an entirely different matter with a huge evidentiary record. Just the sort of thing that Court of Appeals is designed to review."
But the high-visibility of the Microsoft case may change some of the calculations.
"This is not an ordinary case," said Kovacic, and said that the Supreme Court might take the case directly if "it concluded that urgent resolution of the case was imperative."


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